John Cridland, the CBI director general, joined Mr Clegg, employment minister Chris Grayling and leaders of the British Chamber of Commerce, British Retail Consortium and Federation of Small Businesses at a round-table event today at the Westfield shopping centre in Stratford, London, to announce support for the scheme.

Mr Cridland, pictured above, centre, with Mr Grayling, left, and Mr Clegg, said: "The Youth Contract is good news for young people up and down the country. It will encourage firms to give a young inexperienced person a chance so that the scourge of youth unemployment can be tackled.

"We sincerely hope that employers of all sizes looking to hire staff will see the Youth Contract as a real incentive to invest in our young people."

Mr Clegg, pictured above with students at The Skills Place in Newham, east London, said the involvement of businesses was vital for the Youth Contract to succeed.

“Supporting people into work is my priority for 2012 and helping young people get proper lasting jobs is especially important," he said.

“The youth contract will make sure every unemployed young person starts earning or learning again before long term damage is done.

“But government can’t do this alone, we need businesses to play their part too. That’s why the support of the Confederation of British Industry, British Chambers of Commerce, British Retail Consortium and Federation of Small Businesses is such good news."

Mr Clegg urged businesses to get involved by visiting the Department for Work and Pensions' Youth Contract website.

Some of the UK's leading business - including Marks & Spencer, John Lewis, BT and Asda - were also at the round-table event, where they explained how they offer young people work, training and apprenticeships.